Capital gains exemption for transfers between holding and wholly owned subsidiary may be withdrawn if reversal conditions arise. Transfers of capital assets between a holding company and its wholly owned Indian subsidiary are not regarded as transfer; the transferee's cost is the cost to the previous owner and the previous owner's period of holding is considered. If within a specified period the transferee converts the asset into stock in trade or full ownership ceases, the exemption is withdrawn, tax is chargeable to the transferor in the year of transfer, the transferor's assessment should be rectified, and the transferee's cost of acquisition is treated as the acquisition price.